LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - Panel: Alleged Misstatements In Securities Class Action Were Forward-Looking

CINCINNATI - A federal district court did not err in dismissing a securities class action lawsuit because shareholders failed to plead scienter and the defendants' alleged misleading statements were forward-looking and protected, a Sixth Circuit U.S. Court of Appeals panel ruled Feb. 21 in affirming (IBEW Local No. 58 Annuity Fund, et al. v. EveryWare Global Inc., et al., No. 16-3445, 6th Cir., 2017 U.S. Dist. LEXIS 2925).

Mealey's Securities/D&O Liability - High Court Denies Cert In Stock-Drop Case Arising Under ERISA

WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 21 denied a petition for writ of certiorari in a stock-drop case arising under the Employee Retirement Income Security Act (Alex E. Rinehart, et al. v. John F. Akers, et al., No. 16-562, U.S. Sup.).

Mealey's Securities/D&O Liability - Trades Council Appointed Lead Plaintiff In Securities Class Action Lawsuit

SAN FRANCISCO - A shareholder has met all statutory requirements to serve as lead plaintiff in a securities class action lawsuit against a pharmaceutical company and certain current and former executive officers over their alleged misrepresentations concerning their involvement in a generic drug price-fixing scheme in violation of federal securities laws, a federal judge in California ruled Feb. 15 (Greg Fleming v. Impax Laboratories Inc., et al., No. 16-6557, N.D. Calif., 2017 U.S. Dist. LEXIS 22147).

Mealey's Securities/D&O Liability - Judge: Investors State No Actionable Misrepresentations In Securities Class Action

HOUSTON - Dismissal of a securities class action lawsuit is proper, a federal judge in Texas ruled Feb. 14, because lead plaintiffs failed to plead any actionable misrepresentations or scienter in arguing that an offshore energy services company and certain of its current and former executive officers misrepresented repair issues with one of the company's well intervention vessels in violation of federal securities laws (Parvis Izadjoo v. Helix Energy Solutions Group Inc., et al., No. 15-2213, S.D. Texas, 2017 U.S. Dist. LEXIS 20444).

Mealey's Securities/D&O Liability - Investor Failed To Show Lack Of Disclosures Violated Securities Act, Judge Rules

NEW YORK - A lead plaintiff in a securities class action lawsuit against a business intelligence and marketing automation software service provider, certain of its executive officers and underwriters of the company's initial public offering (IPO) failed to show that the defendants violated federal securities law by failing to disclose certain trends in its customer concentration and sales growth, a federal judge in New York ruled Feb. 13 in granting the defendants' motions to dismiss (Andrew D. Nguyen v. MaxPoint Interactive Inc., et al., No. 15-6880, S.D. N.Y., 2017 U.S. Dist. LEXIS 20069).

Mealey's Securities/D&O Liability - Judge Substantially Denies Dismissal Of Claims In Securities Class Action

DENVER - Shareholders have pleaded a majority of their claims against defendants in a securities class action lawsuit against a drug maker, certain of its current and former executive officers and others, a federal judge in Colorado found Feb. 9 in ruling on three different dismissal motions (Sonny P. Medina, et al. v. Clovis Oncology Inc., et al., No. 15-2546, D. Colo., 2017 U.S. Dist. LEXIS 18795).

Mealey's Securities/D&O Liability - Trader, CEO Concealed Subsidiary's Fraudulent Scheme, Investor Argues

NEW YORK - An online foreign exchange trading services provider and its CEO concealed that the company's American subsidiary had engaged in "false and misleading solicitations of its foreign exchange customers" in violation of federal securities laws, an investor argues in a Feb. 8 securities class action complaint filed in New York federal court (Ying Zhao v. FXCM Inc., et al., No. 17-0955, S.D. N.Y.).

Mealey's Securities/D&O Liability - Judge: Pension Funds Failed To Show That Company Misstated Financial Condition

WEST PALM BEACH, Fla. - Two pension funds failed to plead any material misrepresentations or omissions or scienter in arguing that a company and certain of its executive officers issued misstatements regarding the company's financial condition in the wake of an industry downturn, a federal judge in Florida ruled Feb. 8 in granting the defendants' motion to dismiss (In re KLX Inc. Securities Litigation, No. 16-80023, S.D. Fla., 2017 U.S. Dist. LEXIS 17764).

Mealey's Securities/D&O Liability - Judge: Investors' Commodities Exchange Act Claims Don't Meet Morrison Standard

NEW YORK - A federal judge in New York on Feb. 8 dismissed an amended complaint filed by investors who alleged that a financial services firm and its CEO engaged in a scheme to manipulate prices at which certain futures contracts traded on the Chicago Mercantile Exchange Global Platform (CME Globex), ruling that the investors failed to show that the alleged transactions took place on an American exchange as required pursuant to U.S. Supreme Court precedent in Morrison v. National Australia Bank, Ltd. (Myun-Uk Choi, et al. v. Tower Research Capital LLC, et al., No. 14-9912, S.D. N.Y., 2017 U.S. Dist. LEXIS 18174).

Mealey's Labor & Employment - Texas Federal Judge Denies Groups' Motions Challenging DOL's Fiduciary Duty Rule

DALLAS - A Texas federal judge on Feb. 8 denied motions for summary judgment in consolidated cases filed by the U.S. Chamber of Commerce (COC) and other groups opposed to the U.S. Department of Labor's (DOL) new "fiduciary rule" set to take effect April 10, saying that the DOL has not exceeded its authority and that the new rule does not violate the Employee Retirement Income Security Act (Chamber of Commerce of the United States of America, et al. v. Edward Hugler, Acting Secretary of Labor, et al., No. 3:16-cv-1476, consolidated with 3:16-cv-1530, 3:16-cv-1537, N.D. Texas; 2017 U.S. Dist. LEXIS 17619).

Mealey's Securities/D&O Liability - Biopharma Programmer Arrested For Trading On Insider Information

BOSTON - A former programmer for a Massachusetts biopharmaceutical company was charged Feb. 7 with insider trading for conspiring to commit securities fraud by trading insider information about successful drug trials (United States of America v. Songjiang Wang, No. 17-1005, D. Mass.).

Mealey's Securities/D&O Liability - Federal Judge Won't Dismiss Common-Law Securities Fraud Claim

WILMINGTON, Del. - Several current and former executive officers and directors of an electric carmaker used "the wrong procedural tool" in arguing on behalf of dismissal of a common-law securities fraud claim against them, a federal judge in Delaware ruled Feb. 7 in denying a pair of dismissal motions (In re Fisker Automotive Holdings Inc. Shareholder Litigation, No. 13-2100, D. Del, 2017 U.S. Dist. LEXIS 16683).

Mealey's Securities/D&O Liability - Report Show Massive Increase In Securities Class Action Filings In 2016

BOSTON - Federal securities class action filings hit record highs in 2016, up more than 40 percent of the average from 1997-2015, according to a report released Jan. 31 by economic and financial consulting firm Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.

Mealey's Securities/D&O Liability - SEC Pleaded Claims Against Hedge Fund Manager With Particularity, Judge Rules

FORT MYERS, Fla. - The Securities and Exchange Commission has pleaded its claims with particularity and has properly pleaded scienter in arguing that a hedge fund manager and others engaged in widespread securities fraud with regard to an investment scheme in violation of federal securities laws, a federal judge in Florida ruled Jan. 30 in substantially denying the defendants' motion to dismiss (Securities and Exchange Commission v. Kingdom Legacy General Partners LLC, et al., No. 16-441, M.D. Fla., 2017 U.S. Dist. LEXIS 12717).

Mealey's Securities/D&O Liability - Judge: Investors Had Good Cause To Seek Amendment After Deadline

SAN JOSE, Calif. - Lead plaintiffs in a securities class action lawsuit against a medical device maker and certain of its executive officers have shown that they had "good cause" to request leave to amend their complaint because the information they seek to add to the amended complaint was not discovered until after the court-imposed deadline to amend pleadings, a federal judge in California ruled Jan. 25 (In re Intuitive Surgical Securities Litigation, No. 13-1920, N.D. Calif.; 2017 U.S. Dist. LEXIS 10716).

Mealey's Securities/D&O Liability - Securities Class Action Filings Reach Record Highs In 2016, NERA Report Shows

BOSTON - Securities class action filings reached record highs in 2016, with 300 suits filed during the year, representing a 32 percent increase over 2015, according to a report issued Jan. 23 by NERA Economic Consulting.

Mealey's Securities/D&O Liability - 7th Circuit Panel Affirms Dismissal Of Securities Suit Pursuant To SLUSA

CHICAGO - A federal district court did not err in dismissing a trustee's breach of fiduciary duty securities class action lawsuit because his claims were preempted by the Securities Litigation Uniform Standards Act of 1998 (SLUSA), a Seventh Circuit U.S. Court of Appeals panel ruled Jan. 23 in a 2-1 decision (Margaret Richek Goldberg, as Trustee under the Seymour Richek Revocable Trust, et al. v. Bank of American N.A., et al., No. 11-2989, 7th Cir.; 2017 U.S. App. LEXIS 1111).

Mealey's Securities/D&O Liability - Investor Failed To Plead Elements Of Securities Law Claims, Judge Rules

SAN FRANCISCO - Dismissal of an investor's amended complaint in a shareholder derivative lawsuit against members of the board of directors of an electronics company is proper because the investor failed to plead any material misrepresentations, scienter or loss causation, a federal judge in California ruled Jan. 23 in granting the defendants' motion to dismiss (Pete J. Manger v. LeapFrog Enterprises Inc., et al., No. 16-1161, N.D. Calif.; 2017 U.S. Dist. LEXIS 9184).

Mealey's Securities/D&O Liability - Panel: SLUSA Preempts Investor's State Law Claims Against JPMorgan Chase Bank

CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Jan. 23 affirmed a federal district court's dismissal of a class action lawsuit, ruling that an investor's state law claims are preempted by the Securities Litigation Uniform Standards Act (SLUSA) (Patricia Holtz, et al. v. JPMorgan Chase Bank N.A., et al., No. 13-2609, 7th Cir.; 2017 U.S. App. LEXIS 1112).

Mealey's Securities/D&O Liability - 2nd Circuit Revives FDIC Securities Law Claims Against Issuers, Underwriters

NEW YORK - The Federal Deposit Insurance Corp., as receiver for two failed banks, properly filed its complaint for violations of federal securities law within the limits of the FDIC extender statute, and a federal district court erred in dismissing the lawsuit as untimely, a Second Circuit U.S. Court of Appeals panel ruled in a Jan. 18 summary order, reversing and remanding (Federal Deposit Insurance Corp., as receiver for Citizens National Bank and Strategic Capital Bank, v. Credit Suisse First Boston Mortgage Securities Corp., et al., No. 15-1057, 2nd Cir.).

Mealey's Securities/D&O Liability - State Street To Pay Over $64M To Settle Justice Department, SEC Fraud Charges

WASHINGTON, D.C. - State Street Corp. will pay more than $64 million in criminal penalties to the U.S. Department of Justice and the Securities and Exchange Commission to settle charges that it engaged in a scheme to defraud a number of its clients by "secretly applying commissions to billions of dollars of securities trades," according to a Justice Department press release issued on Jan. 18.

Mealey's Securities/D&O Liability - Moody's To Pay $864M To Settle Claims It Provided Compromised Credit Ratings

WASHINGTON, D.C. - Moody's Corp. and two of its subsidiaries (collectively, Moody's) will pay approximately $864 million to settle claims with the Department of Justice, 21 states and the District of Columbia arising from the ratings agency's role in providing compromised credit ratings for residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs), the Justice Department announced Jan. 13.

Mealey's Securities/D&O Liability - Deutsche Bank To Pay $7.3B For Misleading Investors In Sale Of RMBS

WASHINGTON, D.C. - Deutsche Bank AG and its current and former subsidiaries and affiliates and ACE Securities Corp. will pay $7.2 billion in civil penalties and relief to homeowners and others to settle claims that it misrepresented investors regarding the investment quality of residential mortgage-backed securities (RMBS) between 2006 and 2007, the U.S. Department of Justice announced on Jan. 17.

Mealey's Securities/D&O Liability - Supreme Court Agrees To Hear Appeal Challenging American Pipe Tolling

WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 13 agreed to hear an appeal of a Second Circuit U.S. Court of Appeals ruling affirming that shareholders that filed a securities class action lawsuit after opting out of settlement class against the same defendants were barred from doing so as their claims were outside the statute of repose (California Public Employees' Retirement System v. Moody Investors Service Inc., et al., No. 16-373, U.S. Sup.).

Mealey's Securities/D&O Liability - High Court To Hear Appeal In SEC Enforcement Action Over Disgorgement Fee

WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 13 agreed to hear an appeal in a Securities and Exchange Commission enforcement action in which an investment adviser seeks a determination as to whether claims for disgorgement are subject to a five-year statute of limitations under federal statute (Charles R. Kokesh v. Securities and Exchange Commission, No. 16-529, U.S. Sup.).